Economics
Economics MCQs with Answers and Explanations
Economics MCQs with answers and detailed explanations for CSS, PMS, lecturer and GAT tests. Micro, macro and Pakistan economy questions fully explained. Take a scored quiz instead →
The Foreign Trade Multiplier measures the change in national income resulting from a unit change in:
ADomestic Interest Rates
BForeign Exchange Reserves
CTariff Rates
DAutonomous Exports
The Big Push Theory of economic development, advocated by Paul Rosenstein-Rodan, emphasizes the need for:
ASmall incremental investments in agriculture
BA massive, coordinated investment package across interdependent industries
CComplete reliance on foreign aid loans
DUnregulated free market forces
Ragnar Nurkse’s concept of the ‘Vicious Circle of Poverty’ highlights that poor countries remain poor primarily because:
AForeign trade is illegal
BLow income leads to low savings, low investment, and low capital accumulation, resulting back in low income
CGovernment tax rates are zero
DPopulation growth is zero
Arthur Lewis’s Dual Sector Model of development assumes that the agricultural sector possesses:
AUnlimited supply of surplus labor with zero marginal productivity
BExcess capital reserves
CHigh technological innovation
DRigid wage structures set by global markets
High-powered money (Monetary Base or M0) issued by the central bank consists of:
ABroad money (M3) minus gold reserves
BGovernment bonds and Treasury bills only
CCommercial bank demand deposits
DCurrency in circulation plus bank reserves held at the central bank
The Repo Rate is defined as the rate at which:
ACommercial banks lend money to retail customers
BThe Central Bank borrows funds from commercial banks
CThe Central Bank lends short-term money to commercial banks against collateral
DGovernments borrow money from foreign international funds
High inflation caused by persistent cost increases in raw materials, energy, or wages is termed:
ACost-Push Inflation
BDemand-Pull Inflation
CStructural Inflation
DHyperinflation
The Leontief Paradox in international trade empirically challenged which established trade theory?
ADavid Ricardo's Comparative Advantage
BHeckscher-Ohlin Model
CAdam Smith's Absolute Advantage
DRostow's Growth Model
The Terms of Trade (TOT) of a country measure the ratio of:
ATotal Foreign Debt to GDP
BGross Exports to Gross Imports
CNominal Exchange Rate to Real Exchange Rate
DExport Prices to Import Prices (Px / Pm) × 100
An import quota restricts trade by directly limiting:
AThe price at which foreign goods are sold
BThe physical quantity of a good that may be imported
CThe tax revenue collected on foreign goods
DThe currency exchange rate